Fresh Blood Product Procurement

The NBA funds the operations of the Australian Red Cross Blood Service (Blood Service) through a Deed of Agreement (Deed) with the Australian Red Cross Society (Red Cross). The Blood Service is an operating division of the Red Cross and not a separate entity.

The Blood Service is the sole supplier of fresh blood products in Australia and operates under the Deed as the Governments single provider of fresh blood products in Australia.

The inaugural three-year Deed commenced on 1 July 2006 and expired on 30 June 2016.

Negotiations for a new Deed between the NBA and the Blood Service were successfully finalised on 12 February 2016, and the new Deed was executed on 20 February 2016. The new Deed commenced on 1 July 2016 and continues for nine years until 30 June 2025.

The new Deed can be accessed through the following link:

Deed of Agreement (pdf) (807.88 KB)

The new Deed establishes a high-level legal framework in relation to national supply of blood and blood products. The Deed is supported by a Funding and Service Agreement (FSA) which outlines the commitments of governments to meet the fair and reasonable costs of the Blood Service for the collection, production and distribution of fresh blood products and services. The FSA also commenced on 1 July 2016 and continues for a three year period. Product unit prices are negotiated and determined prior to each funding cycle identified in the FSA.

The FSA can be accessed through the following link:

Funding and Services Agreement (pdf) (155.68 KB)

The FSA also describes the way in which blood and blood products are priced and outlines the methodology for payments from the NBA to the Blood Service based on an Output Based Funding Model (OBFM).

The OBFM can be accessed through the following link:

Output Based Funding Model (pdf) (298.42 KB)

Blood Service: Expenditure and Product Mix

Actual expenditure to the Blood Service decreased from $583.13 million in 2013-14 to $547.10 million in 2014-15 (see table below).

TABLE: Annual Expenditure - Blood Service, 2003-04 to 2014-15

Year Amount ($M) % Growth
2003-04 247.8 -
2004-05 277.0 11.8
2005-06 297.7 7.5
2006-07 327.1 9.9
2007-08 369.1 12.8
2008-09 417.2 13
2009-10 456.1 9.3
2010-11 496.6 8.9
2011-12 526.3 6
2012-13 549.3 4.4
2013-14 583.13 6.2
2014-15 547.10 -6.2
TOTAL 4569.6 7.2 (average)

In 2014-15 the Blood Service achieved an operating surplus of $28.5.million through continued implementation of efficiency measures.

Blood Service Performance - Statement of Expectations

The Statement of Expectations (SoE) for the Australian Red Cross Blood Service was approved by all Health Ministers. The SoE commenced in July 2013, and extends until 30 June 2016.

The Blood Service is required to report to Ministers on their performance against the SoE. The 2013-14 report has been provided to Ministers.

Statement of Expectations and Performance Reporting